JPMorgan: bitcoin price could reach $170k if it trades like gold

Despite the record liquidation of bitcoin positions, JPMorgan Chase believes that the major cryptocurrency is strongly undervalued compared to gold and retains the potential for significant growth on a horizon of up to a year. According to the bank's analysts, the key factor for the bitcoin exchange rate in the near term will be the ability of its largest public holder Strategy to maintain financial stability.

A volatility-adjusted comparison of bitcoin, which is increasingly perceived as a protective asset, with gold points to a price of the largest cryptocurrency of about $170 thousand on the horizon of the next 6-12 months, The Block reports with reference to JPMorgan. This is not a forecast, but a "mechanical calculation" designed to demonstrate the short-term potential of bitcoin during this period, emphasized analysts led by Nikolaos Panigirtzoglou, managing director of the investment bank. It has not changed compared to the assessment of a month ago, that is, before the collapse of the cryptocurrency.

According to JPMorgan, the bitcoin exchange rate now "continues to fluctuate below its cost of production." "As [mining] revenues decline amid high energy costs and a declining token price, some high-cost miners have been forced to sell bitcoins in recent weeks," the bank's analysts said in a report. However, it is not the miners that will determine the price in the near future, but Strategy's ability to keep the value of the company - the combined valuation of debt, preferred stock and equity - above the market value of bitcoin assets on its balance sheet and not sell bitcoins, JPMorgan said.

Bitcoin reached an all-time high in early October, but in November it slipped into a bear market phase. According to Coinmarketcap, the largest cryptocurrency was trading around $92,000 on December 5. This is only $2,000 above the cost of its mining, JPMorgan calculated.

This week, Bank of America began offering wealthy clients a 1-4% cryptocurrency position in their portfolios. In October, another major Wall Street bank, Morgan Stanley, advised investors to hold up to 4% of funds in such assets and compared bitcoin to "digital gold" because of its scarcity. BlackRock, the world's largest investment company, recommended allocation to bitcoin at 1-2% back in 2024, while its competitor Fidelity suggested a higher range - 2-5% of the portfolio, with a possible increase in the share to 7.5% for young investors, MarketWatch notes.

This article was AI-translated and verified by a human editor